My New Blog

It has now been since May 1 the HVCC has taken affect.  Needless to say it has caused significant heart burn in the appraisal industry for a number of reasons. 

The Home Valuation Code of Conduct was developed to keep mortgage brokers from influencing appraisal outcomes.   Thus we have the creation of scores of Appraisal Management Companies that act as "buffers" between the appraiser and the broker.   That is clearly a good goal.  Brokers should not be influencing outcomes of appraisals or threaten to take business away if values don't come in.

But here are the problems from an appraiser's stand point:

1)  Appraisal management companies are now competing for work.  So they will try to lower fees, promise ridiculous turn times, and require constant updating.  This isn't a problem now because of the high volume.  But when the volume goes back to normal appraisers are going to be on the short end of the stick.  AMC's will cut fees and expect the world from appraisers to maintain business. 

2)  Appraisal management companies slow the process down considerably.  I don't know how many times I have been asked by the borrower if I have turned in the appraisal yet.  Sometimes it has been a week or two after I have sent it to the AMC.  In the "old" days the broker would get it in a few days after I did it.

3)  Appraisal management companies have sought to add "value" by doing reviews of appraisals before they are sent to the lender.  This really slows the process and is time consuming.  For example today I was asked to comment that no agricultural activity was taking place on a 10 acre parcel.  Well the problem was that it was zoned Forestry not Agriculture.  Agriculture activity isn't legal.  So I had to open up the appraisal, write a comment, and send it in again because a reviewer didn't have a clue about zoning.  That's not so serious, but if you have to constantly do this, after awhile it gets real old.  I swear that reviewers don't read the report either.  I don't know how many times I have had to make underline and put in italics comments I have put in the report which they are asking for.

4) Appraisal management companies are constantly hounding us to update schedules, appointment times, etc.  I sometimes feel I spend an hour just on web sites trying to keep them informed about things which are pointless. I understand their need to keep the client informed, but I never had so much problem keeping clients informed until AMC's were involved.  What a hassle.

5) Appraisal management companies slow and confuse the lines of communication.  Yesterday I was asked to do an appraisal and found out the homeowner was in the middle of remodeling the house.  It had no flooring or kitchen.  So I called up the AMC, they had to call the lender, the lender had to call the homeowner, the lender then called the AMC, the AMC then called me.  Well they then came back to me with a list of conditions, which I then had to call the homeowner about, which I then had to call the AMC about, which the AMC then had to call the lender.  This little circus took about a half hour of phone calls.  Waste of time!  If I could have talked to the lender directly it would have been solved in 5 minutes. 

Things are busy now, and the fees are fairly decent because there is plenty of work.  I dread the day when it gets slow, because AMC's will then make my life even more difficult than it is.  This will simply drive appraisers out of the business, which will ultimately lead to higher fees as appraisers simply say, "NO!" to AMC's.